How to Grow Your Homebuilding Business by Identifying Customer Loyalty

2.7 min readPublished On: May 20, 2020

In 2003, consultant Fred Reichheld surveyed thousands of customers to better understand their behavior. The most important question he asked was this: “On a 0-10 scale, how likely are you to recommend this company to family and friends?”

The answers to this question helped Reichheld develop a new metric: the Net Promoter Score (NPS). This score is assigned to businesses based on their customers’ loyalty. Unsurprisingly, it can also predict business growth. 

At Avid, we’ve incorporated elements of the NPS into our tools to help homebuilders and remodelers grow. Read on to find out how.

Focusing on the Customer Over the Business 

At Avid, we began using elements of the Net Promoter Score as early as 2006. Our methodology is similar to Reichheld’s but with one important twist.

The traditional NPS focuses on the business. It gives businesses a loyalty score based on customer sentiment.

At Avid, we shift the focus to the customer, giving customers their own loyalty score. Doing so gives homebuilding professionals clear customer insights that they can use to their advantage.

Marketing to Homebuyers with Strong Customer Loyalty

The loyalty score that we give to customers is helpful to homebuilders for a number of reasons. For one, it indicates whether a customer is likely to make a referral. Homebuilders can then design follow-up marketing based on “referral potential.”

Encouraging all customers to provide feedback is important for both your internal Customer Experience programs and for your online reputation on public review sites. Being able to proactively identify and monitor loyal customers and less loyal customers is critical for promoting and protecting your online status. The encouragement to provide feedback and public reviews may nudge loyal customers to refer a friend or leave a positive review. Alternatively, a homebuilder could reach out to less loyal customers via a phone call to ask what they could have done better – and possibly avoid a negative online review. 

4 Final Tips to Capitalize on Customer Loyalty 

When it comes to identifying loyal customers with “high referral potential,” keep in mind these four tips:

  1. Think Critically: While Reichheld’s Net Promoter Score is an important contribution, it’s only one piece of the equation. Be careful labeling causal relationships without evaluating the entire customer experience.
  1. Market Correctly: To boost referrals, target customers who are satisfied with their homebuying experience, and likely to make a referral.
  1. Delight Continually: Because overall customer satisfaction plays a key role in referrals, look to delight your customers throughout their homebuying journey. This will then play a key role in generating referrals and positive online reviews.
  1. Invest Carefully: You’ll have little insight into the customer experience without the right tools. Our industry-leading AvidCX platform not only helps you gauge and increase customer loyalty, but it also helps you encourage and manage referrals, and generate more online reviews. (To learn more about the power of AvidCX to transform your business, click here.) 

Simply put, knowledge is power. Having the right information — like customers’ loyalty levels — can help you succeed in today’s competitive market and grow your homebuilding business to new heights.

Avid Insights Team